Deputy Ardagh was in possession.
Finance Bill 1999: Second Stage (Resumed).
I wish to share my time with Deputy Hanafin.
That is agreed.
The increase from £50,000 to £100,000 in the maximum amount of company profits qualifying for the 25 per cent reduced rate of corporation tax is welcome. Having the rate of corporation tax at roughly half of the top marginal personal tax rate encourages the investment of profits in businesses. Historically small Irish businesses have been undercapitalised. This encouragement for reinvestment improves the capitalisation of companies and helps them to become stronger and better able to compete in the international framework in which they operate. The corporation tax take in recent years has been much improved due to the reduction in its rate. It is also welcome that the rate of corporation tax is to be reduced to 12.5 per cent on a phased basis by 2003.
The need for Luas and an improved public transport system is underlined by the report of a 20 per cent increase in car sales in January 1999. Tax relief for the provision of park and ride facilities and certain related developments is welcome. The limit of 50 per cent in respect of expenditure on commercial and residential developments associated with the park and ride development should be examined. A park and ride facility does not appear to be as capital intensive as the development of commercial or residential property. Perhaps the park and ride complex would be better balanced and made more economically viable by the allowance of a higher concentration of commercial and residential development. I accept that parking for users of commercial developments and residences may limit the spaces available for the users of park and ride facilities and that a balance must be struck. I accept what the Minister said yesterday, that he does not want to introduce too many reliefs or allowances of this nature, as they are contrary to the ethos of our taxation system.
I welcome the save as you earn share scheme which provides for employees to save for a certain period to acquire shares in their company at a discount on the market price at the start of the savings period. I also welcome that no tax will be applied until those shares are subsequently sold. The terms of the save as you earn scheme were decided after consultation with IBEC and ICTU. This shows the value of social partnership in the continuing improvement of our economy and long may it continue.
Section 44 provides for granting section 23 relief for rented residential accommodation for third level students. This is subject to the guidelines of a number of Departments. I wholeheartedly support this development as a result of the measures adopted after the publication of the Bacon report, particularly in light of the scarcity of economically priced rental accommodation This is an example of the flexibility and ingenuity of the Minister in tackling, in a focused manner, a problem which arose only recently.
Section 41 provides for a number of changes in the rural renewal scheme. Dublin is bursting at its seams and the demand for housing and accommodation is ever increasing. Granting relief for expenditure in towns within commuting distance of Dublin would help first time buyers to purchase a home and take pressure off house prices in Dublin by reducing the demand for them.
Section 28 is a welcome novel one. It exempts from income tax the benefit-in-kind arising from the provision of an annual or monthly train pass. I hope this will help encourage commuters to transfer from private to public transport.
Section 29 provides that child care services will not be taxed as benefit-in-kind, if provided by the employer. Many studies and reports have been undertaken in this area in recent years and it is obvious that a substantial change is needed in the attitudes towards and responsibility for the provision of child care. This must be viewed as a societal rather than an individual problem. Responsibility for child care rests on all of us.
To a certain extent section 25 takes God out of taxation legislation as it will be possible for persons to affirm as an alternative to taking an oath. On reviewing the Constitution the Progressive Democrats Party suggested that reference to God should be removed from it. Is this the Progressive Democrats' contribution to the Finance Bill? I say this tongue in cheek as I acknowledge that the policies of the Progressive Democrats in relation to taxation have had an obvious input into the first two of the Government's five budgets, and I expect this will continue.
Regarding income tax, the increase in exemption limit to £6,500 for a single person and £13,000 for a married couple for persons over 65 years of age is very welcome. As the Minister stated, this will take 15,000 elderly people out of the tax net.
I am also very much heartened and delighted that the tax credit system is being introduced in terms of personal allowances. This, of course, will mean in future that if personal allowances are increased, those on lower incomes will benefit to the same extent as those on higher incomes.
I am delighted and encouraged that the allowance of £8,500 for a family to employ a carer can now be apportioned between the people who contribute to that cost. This was a bone of contention in many families for a long time and this provision is very worthwhile and welcome.
In welcoming the Finance Bill I recognise it gives effect to the budget which was typically Fianna Fáil in nature in so far as there was something in it for everybody. I particularly welcome the fact that those on lower incomes get particular recognition in the Finance Bill.
I wish to focus on two elements of the Bill, namely, those which deal with the young in terms of child care and students and those which deal with the elderly. There are two sections dealing with child care. Section 43 allows for capital allowances where construction, extension, refurbishment or conversion is necessary in child care premises which need to be brought into line with the changes brought about in the Child Care Act, 1991, and the amending legislation of 1996. This provision is very welcome as it means the cost can be offset over seven years. However, I regret it is not enough. The second relevant section is section 29 whereby services provided by employers or a group of employers for their employees, be they free or subsidised, cannot be charged to income tax as a benefit in kind. Again I welcome the provision but it is not enough.
It is only now that we are beginning to realise the extent of the crisis in child care. I speak in particular with reference to my constituency of Dun Laoghaire where parents are being put to the pin of their collar to pay child care costs, where there have been cost increases of over 20 per cent in the past couple of months and where parents have been asked to pay an extra £126 per month to have their child looked after while at the same time we are encouraging parents, in particular young women, into the workforce.
Without hesitation I say that if parents were farmers and children were fodder, the crisis would have been recognised long ago and grants would have been given. Unfortunately, we do not recognise the crisis which is affecting parents. In examining in particular the provisions in relation to benefit in kind, I ask whether we want to encourage parents to bring their children in a car through rush hour traffic to their place of work and deposit them there in a child care facility? Naturally, we would encourage employers to provide services for their employees, but surely the best place for a child whose parents opt to have him or her in full day care is in their local residential community. I ask that the Minister extend the facility in section 29 to community based projects so that if local employers and shopkeepers want to invest in a facility for the good of a community such projects could be treated favourably in the tax code.
The Southside Partnership, based in Dun Laoghaire, has come up with a very imaginative proposal for the former cottage home in Dun Laoghaire and they are inviting investment from local employers. Those employers must be encouraged to provide child care facilities for the community. They might then be able to help the distraught mother living in Ballybrack who rang me yesterday and told me she was paying £70 per week for child care but now, following an immediate increase, is paying £90 per week. She earns £90 per week and cannot afford child care any more. There is no place for her to put her child. It is a crisis and I ask the Minister to see if there are ways we can extend schemes and give grants to facilitate parents who are really being put to the pin of their collar.
The national child care strategy, which was launched last week, must be considered in conjunction with the recommendations of the Commission on the Family and the reports on pre-school and early school education to ensure long-term facilities are made available and recognition is given to all parents irrespective of where they work. Perhaps in the interim something could be done to solve the immediate crisis.
Another element relating to young people which I welcome is section 31 which gives tax relief for gifts of money made to the scientific and technological education investment fund. One of the most far-reaching decisions on technology and technological education in recent years was the establishment of this fund. Every encouragement must be given to investors to match the money invested by the Department.
Another issue relating to young people, which is a problem, is that young students, particularly those coming to Dublin city, are unable to find accommodation at reasonable rates. Section 44 provides 100 per cent tax relief for rental residential accommodation in respect of the provision of third level student accommodation. This is a great encouragement to third level institutions, many of which have very valuable land, to provide more facilities for students, thereby easing the burden in the long-term for students coming to Dublin seeking accommodation.
I particularly welcome the provisions relating to the elderly. The fact that 15,000 people over the age of 65 years will no longer be in the tax bracket is something we all welcome. The increase in the tax exemption level to £6,500 for persons aged over 65 years will be welcomed by many elderly people in my constituency. Equally, the announcements made about pensions will be welcomed. The new provisions ensure an increase in the amount which can be claimed as a deduction for the funding of retirement provision. The fact that people will not be restricted to one pension, people can retain ownership of the capital sum and pensioners can have a greater role in the investment of accumulated funds will encourage people to plan for their future. It will allow people more flexibility and control. Surely, the next logical step is a State funded pension scheme. The scheme which currently exists is all right as long as the number of elderly is fewer than the number of people working. The profile of our population is changing in such a way that perhaps we should be moving towards a proper, State funded pension scheme.
I welcome two other elements in relation to the elderly, the first being the extension of the existing tax allowance for employers of carers. Carers have not been recognised over many years and the new elements in the Finance Bill at least give recognition to this group of people who are so dedicated that they sacrifice their own lives for the good of others.
On section 42 on private convalescent facilities and the capital allowance for expenditure on that there is a grave need for convalescent facilities to free up acute hospital beds. The idea is that convalescent care would be an alternative to hospital care for patients recovering from acute hospital treatment. There are a number of large houses in my area which are very appropriate for this type of work. I worry about whether these facilities, which have to date served as retirement homes, will be converted fully into convalescent facilities. It is becoming a problem that people cannot find places in retirement homes. I hope the Minister will continue to give tax and capital allowances to places which want to convert into full time retirement homes as well, because it will be a problem for us in the future.
Failtím roimh an mBille Airgeadais seo sa tslí in a chuireann sé i bhfeidhm an cháinaisnéis mar a fógraíodh í ag deireadh na bliana seo caite. Fáiltím roimhe go háirithe mar go dtugann sé aitheantas do chuile dhuine atá ag obair sa tír seo, daoine atá ar ioncam íseal agus ar mheánioncam. Fáiltím chomh maith roimh gach rud atá tugtha do sheandaoine agus do dhaoine óga.
In welcoming the provisions, I recognise that much needs to be done and I particularly ask the Minister to address the crisis in child care.
One of the main features of this Finance Bill is the Minister's decision to give unprecedented powers to the Revenue Commissioners, as contained in sections 189 and 190 and outlined by the Minister in the House last evening. No doubt these powers will be welcomed by the compliant taxpayer who has been increasingly disillusioned by the level of fairness in our taxation system. I have not experienced such a level of disgust among individuals who have always paid their lawful tax to the State. This has no doubt been fuelled by the scandals emerging from the tribunals and tax scandals such as Ansbacher and National Irish Bank. These have exposed the inadequacy of existing tax legislation and lack of enforcement. It also begs the question as to whether the powers in this Bill are misdirected and whether the banks, as much as the individual wrongdoer, should be the target, which Deputy Noonan argued strongly yesterday evening.
The level of tax evasion in recent years was actively encouraged by the two tax amnesties introduced by Fianna Fáil in 1988 and 1993, which were described by some commentators at the time as a charter for cheats. These amnesties rewarded the tax evader and the wrongdoer. The measures in this Bill will provide the powers to the Revenue Commissioners, if suspicious of tax evasion, to investigate the relevant accounts without having to establish a prima facie case before the courts. There will be general public support for these new measures to investigate non-resident accounts, especially when our largest bank, AIB, held 53,000 non-resident accounts. It would appear NIB actively promoted off shore bonds for tax avoidance purposes. I hope the new powers in the Bill will have the effect of restoring public confidence in our tax laws. However, at the end of the day, people will only have confidence in the fairness of our tax system if these laws are vigorously enforced.
Despite the Revenue Commissioners having very strong powers already at their disposal, only one custodial two year suspended sentence has been imposed for tax evasion. The compliant tax payer will have to see some high profile convictions of tax evaders to convince them that this Government, the Revenue Commissioners and this House are serious about the implementation of a fair and equitable tax system.
The proposed new powers are causing concern in some quarters. The Institute of Taxation of Ireland, for example, which represents many tax practitioners, expressed serious reservations about the new powers and called for a new tax ombudsman to oversee them. The institute claims the new powers are so extensive that there may no longer be sufficient checks and balances in the system to protect the rights of innocent taxpayers. The former president of the Institute of Taxation, Brian Bohan, a solicitor, was quoted in the Sunday Business Post as saying that there are major question marks over this legislation on a number of grounds, including constitutionality, fair procedures and balance and that this is a knee-jerk reaction to an unfortunate situation.
The new powers have also come in for criticism from the Irish Council for Civil Liberties. Siobhan Ní Chúlacháin of the council commenting on the new measures said these are very wideranging, broader than the powers the Garda have if they suspect someone of committing a crime, and that opportunities for abuse are bound to arise and without the safeguard of the courts some system of checks and balances must be put in place.
No doubt the sections dealing with the new powers will be revisited on Committee and Report Stages. A number of balancing amendments, if necessary, will be put forward by the Opposition spokesperson and maybe the Minister. Overall my party supports the new provisions. However, I agree with Deputy Noonan that we need a White Paper on taxation to be published in 1999 which would clarify the many consequences for the taxpayer of the provisions in this Bill and many of the grey areas which have been introduced because of the complex nature of and the new provisions in the Bill.
I will comment briefly on tax reliefs in this budget. I welcome the improvement in the Bill for the PAYE sector, in particular concessions for lower income earners and those over 65 years. Because of the changes, as pointed out by the Minister, low income earners on less than £100 per week will not have to pay tax, which is very welcome. However, we have a long way to go before we arrive at the level of our nearest neighbours in England where one can earn up to £180 without being taxed.
From the point of view of competitiveness, it is very important that we increase the band and take as many low income earners as possible from the tax system. Many small companies, especially in rural Ireland, are really stretched to survive and compete and are not in a position to give their employees extra wages apart from the requirements under Partnership 2000. The only way these people can be rewarded is through the taxation system. The Minister should continue this policy which was that of the Rainbow Coalition going into the last election. We wanted to target tax benefits at the lower paid and to increase the tax bands and personal allowances. This is certainly a return to that policy and a departure from the policy of reducing the tax rates which the Minister pursued in last year's budget. From the point of view of rural Ireland and small businesses throughout the length and breadth of this country, it is the only way they can survive and remain competitive. I certainly welcome that departure in the budget.
There are two aspects in the Finance Bill I would like to address. One is the widespread concern in the film industry about the future of section 481 on tax reliefs for investment in film production and the other is the issue of vehicle registration tax. I will refer to the film industry first. Despite the Minister's assurances, there is widespread concern about the future of section 481 tax relief for investment in film production which is being extended for a further 12 months pending full consideration of special studies to be published by the Minister for Arts, Heritage, Gaeltacht and the Islands. This has led to widespread uncertainty at all levels of the industry.
Section 481, previously section 35, has been an invaluable instrument in the growth of the film industry, especially the indigenous production sector. It allows producers to approach the international market with a proportion of their budget in place, a key element in triggering foreign investment in the form of pre-sales and co-production finance. It is treated as their equity, allowing ownership of the film, thereby providing potential for future revenue from foreign sales.
As the incentive can only be used by producers who have raised a significant proportion of their budget in the form of international pre-sales, the focus is on developing and maintaining a strong orientation towards the international market. This has created an outward looking and internationally aware independent production sector with a high product standard and helped to create strong links and co-operation between the film production sector and financial sector and generated expertise in the area of international film finance.
The quality of training is of a high standard. Technicians, actors and other participants secure more challenging and better quality work in locally produced films. Much of the writing, directing and acting talent nurtured in recent years has achieved a level of international confidence with international financers, which in turn assists the financing of more ambitious projects. The Minister's announcement has created major shock waves in the industry. He should table an amendment on Committee Stage guaranteeing the continuation of section 481 for a further five years.
Fine Gael supports the renewal and enhancement of section 481 for a number of reasons. Enhancement of the existing incentives would enable indigenous production companies to develop business plans in the medium and long-term. Output would be increased and mechanisms organised to encourage proper and systematic project development as well as strategies to retain programme and film rights. Improvements would encourage film related services, including the development of studio facilities, and post-production companies to plan for growth and investment. Allowing tax relief of up to 100 per cent on expenditure would encourage the emergence of additional studio, sound post-production and laboratory facilities with additional employment and economic activity.
Providing stability for the industry would build on progress made in recent years in the crucial area of talent development – directors, writers, producers, actors and technicians who have made their mark on the international scene. It would encourage them to remain here. Irish producers have encouraged and fostered the growth of this talent.
Given the sensitivity of the industry to exchange rate fluctuations and the increasingly attractive incentives available in other countries, improvements would give Ireland a competitive edge. The British have not only copied the incentives provided here but improved on them. Because of the post-production facilities available, Britain is becoming an attractive location for film makers. Irish producers should be enabled to go to the market with well structured commercial ideas to put them in a better position to hold on to film rights.
Film Makers Ireland, the representative organisation for feature film producers, is deeply concerned that section 481 is only to be extended for a further year. It is producing a special report which will indicate clearly the benefits of film making and the effects of the industry on employment creation. I do not want to pre-empt its findings but it will make a strong case for the continuation of section 481.
The short-term measure proposed does not provide an appropriate framework for the film and television industry to continue its phenomenal progress. This contradicts directly Fianna Fáil's long-term strategic policy on the industry as outlined in its policy document of December 1996 prior to entering Government. It promised enhancements to section 481 which have not materialised.
The economic and employment benefits speak for themselves. Figures indicate that returns to the Exchequer from activity driven by section 481 have increased each year since 1993. There has been a substantial net benefit. In 1997 IBEC estimated net returns at £14.5 million. Total employment, direct and indirect, has risen from 1,200 in 1993 to over 4,000 last year. Ireland has a first-class reputation with the international film and television community and is a premium location for production.
I am aware from my contacts in America that there is concern and that a number of projects have been put on hold. In Los Angeles, where the screen commission is to be launched later this month, the Minister will meet people who are confused. The timing of this decision could not be worse. A significant number of jobs may be at risk unless a more strategic and long-term approach to supporting the industry is adopted by the Government.
James Flynn, co-producer of "Angela's Ashes", commented, "It is ironic that the week that Steven Spielberg's "Saving Private Ryan" has received Oscar nominations we may now have a period of uncertainty in Ireland which will be immediately highlighted by our many overseas competitors". In a recent article in one of the Sunday newspapers Louise Casey of the Galway company, Magma films, was quoted as saying:
We have a £5.6 million drama series with a German broadcaster hanging in the balance. The single, overwhelming reason they agreed to the project was section 481.
She said that up to 200 potential jobs could be lost over the next two to three years if section 481 is not extended beyond April 2000. In warning that the dropping of the section is likely to be exploited by Ireland's international competitors, James Flynn was quoted in the same article as saying:
Ireland already ranks very low down the incentives tables, and incoming producers are very sensitive to the market. This has made the job of the Screen Commission, which is to have its international launch in Los Angeles later this month, very difficult. Film production, by its nature, is a long-term project, but we can only give short-term guarantees.
The message should be conveyed strongly to the Minister for Arts, Heritage, Gaeltacht and the Islands as well as the Minister for Finance and the Taoiseach that section 481 should be amended immediately. My party's spokesperson on the arts, heritage, Gaeltacht and the islands, Deputy Kenny, and I will table an amendment to this effect on Committee Stage.
I now come to the most extraordinary part of the budget. I cannot understand why the Government decided to attack, not the motor industry, but motorists. Motorists are already burdened by the worst roads in Europe, in rural Ireland, and by gridlock and traffic congestion in cities. They were targeted in the budget and there is nothing in the Finance Bill to rectify those injustices. The increase in VRT provided for in the Finance Bill cannot be easily justified. It is not an environmental tax or a tax on the motor industry, it is another tax on motorists.
Car ownership levels will continue to rise as we become a more affluent and modern society. Even though we experienced substantial increases in sales of new cars in the past few years we are still catching up on our European neighbours. There are 30 cars per 100 people in Ireland, compared to 36 per 100 in Northern Ireland and 50 per 100 in Germany. The recent increase in VRT was hailed as an environmental tax, but this is not accurate as it will encourage drivers to retain older cars rather than upgrade to new vehicles.
The motor industry has gone to great lengths to reduce air pollution, to improve fuel consumption and so on. It takes 30 new cars to create the same level of emissions as one car made five years ago. Almost 85 per cent of a new car is recyclable and the most fuel efficient new cars are in the 1.6 litre to 2 litre category, the segment targeted for the VRT increase. VRT and VAT make up a staggering 61 per cent of the pre-tax price of a standard family car, yet our pre-tax price is in line with the European average. A retail price of 25 per cent more than other EU countries is unjustifiable and highlights that the VRT increase penalises the motoring public. The increase across the 1.6 litre range will have a negative impact on PAYE family car owners, who are traditionally in this range, fleet and SME owners and, particularly, the rural farming population who rely on small diesel engines. Sixty four per cent of car sales outside Dublin are diesel sales in the 1.6 litre and 2 litre range.
The number of cars in Ireland will continue to increase. The buoyant economy, resulting in an increase in the numbers at work, and the welcome return of our well-educated young people who had to emigrate to secure employment, will guarantee this trend continues. Increased car ownership is a reality. VRT increases will not dampen new car sales but will leave the negative effect of leaving older cars on roads for longer periods. At a time when the EU is introducing directives to encourage the removal of old cars to improve the environment, it makes no sense to increase VRT as this will have the opposite effect. My proposal is for a modest increase in the 22.5 per cent VRT band from 1.4 litre to 2 litre engines. This would help the environment, alleviate the tax burden and reduce the cost of motoring for ordinary motorists, PAYE workers and fleet drivers in rural Ireland.
The VRT provisions in this Bill are unnecessary as Government revenues from this source would have increased anyway due to economic buoyancy. The Minister pointed out that VRT increases are not adversely affecting new car sales but that is not the issue. The issue is the treatment of consumers who are being cheated out of the benefits of the single European market and are paying more for cars than is reasonable, a price which is well above the European average. This is a result of the level of VRT.
The increases were introduced under an environmental pretext, but this is an anti-environmental measure. To take steps which discourage the replacement of older vehicles with newer, more environmentally-friendly ones, flies in the face of environmental good sense and is contrary to environmental aspirations at EU level to reduce CO2 emissions by encouraging the replacement of older vehicles. It is clear the VRT increase was nothing more than a knee-jerk reaction to concerns about traffic congestion in major urban areas. I have no doubt it was also influenced by the environmental report presented to the Minister and the Government before the budget. It is obvious they took more notice of that report than of representations by the motor lobby or from Members who expressed concerns about VRT.
Increases in VRT will contribute nothing other than ensure vehicles stuck in traffic will be older and more polluting, the opposite to what is intended. Vehicle numbers will continue to increase even if new car registrations were halted by used imports and the retention of older vehicles. Our buoyant economy will result in more people wishing to own cars. There will be higher car ownership, irrespective of VRT.
The problems of congestion in major urban areas can be attributed to the lack of progress in, and a commitment to, public transport and the road infrastructure rather than to the number of cars. If the VRT proposals are a reaction to traffic problems then rural Ireland is being asked to pay the largest proportion of the increases. Diesel engines, which produce lower CO2 emissions than equivalent petrol engines, are a necessary choice for most people in rural Ireland. They are the work horses of rural Ireland. Sixty four per cent of 1.4 litre and 2 litre cars outside Dublin are diesel engines. If one were to remove registrations from other major urban areas, the diesel percentage in rural Ireland would be even higher.
In my contribution to the budget debate, I stated that this measure was more of an attack and a tax on those in rural Ireland than on those in urban areas. The 1.7 litre and 1.9 litre diesel engines are the smallest available, so many in rural Ireland have no choice but to purchase a vehicle targeted for this increase in VRT.
We have created an environmental dustbin in which older vehicles are welcomed but none are allowed leave. This means we are responsible for disposing of more older vehicles than should be case because of the number of second-hand cars coming into the country. The environmental and financial costs associated with the disposal of end-of-life vehicles are a major concern for all developed European economies and will be of increasing concern for Ireland in the future. The Minister should introduce an amendment to allow for the refund of a percentage of VRT relative to the value of the vehicle at the time of its export. This provision would give an incentive to many dealers and individuals to export cars. Ireland is not competitive in this area. Prices are too high to allow an export trade in secondhand cars.
The purpose of the amendment I intend to introduce will be to broaden the low VRT band of 22.5 per cent to cover vehicles up to two litres. I appeal to backbenchers on the Government side, many of whom have privately expressed their support for this measure to the motor industry, to support the amendment and to convince the Minister that there would be no loss of revenue if the provision was introduced. If such a measure was implemented from 1 April, given the buoyant level of car sales so far this year, Government revenue would still be on target for an additional £42 million from vehicle registration tax. There would not be a budget shortfall as a result. I intend to speak to Deputy Lenihan and others who made this a major issue during their contributions on the budget debate and subsequently. They must talk to their Minister and ensure that my simple and reasonable amendment is accepted.
It has reached the stage where a charter of rights for motorists is required. They are subject to the worst roads in Europe, traffic congestion and gridlock. They also pay the highest amount of tax. There has been progress on PAYE. It is now time that motorists got a break. I intend to pursue the cause of motorists on Committee and Report Stages.
I wish to share my time with Deputies Brendan Smith and Eoin Ryan.
Is that agreed? Agreed.
I congratulate my colleague, Deputy Deenihan, on his excellent contribution to the debate. As a backbencher, I take note of his comments.
I welcome the opportunity to contribute to the debate on this important Bill. It is one of the largest Finance Bills ever published and contains a series of important initiatives to reform the tax system in favour of the lower paid, which I welcome. The Bill will cut personal taxation rates for all taxpayers, introduce significant new tax reliefs and set a new agenda for tax relief and pension provisions.
The Minister for Finance, Deputy McCreevy, indicated that he is making radical change when such change is desirable. He pursued the strategy of moving to tax credits, which was universally welcomed. He is now making structural changes in the pensions area. These changes will be a challenge to existing methods and present new opportunities to providers of pension products. As the Minister stated, these changes are in the interest of those who count, that is, the pensioners who worked and saved to accumulate the pension fund. The new arrangements for pension provisions will allow greater choice and flexibility in this area. These apply mainly to the self-employed and while the details of the legislation on the new pension rules are not in the Bill as published, they will be included on Committee Stage.
New tax incentives for owner-occupiers of housing in rural renewal tax designated areas will promote the attractiveness of such areas for residential purposes. This will be a major boost to rural Ireland, especially larger urban areas. Tax changes will allow a special Government bond programme to be undertaken by the NTMA to improve liquidity in the bond market.
The Minister said that the Bill implements the £600 million budget tax package aimed at the lower paid. It gives effect to the major fundamental changes in personal taxation contained in this year's budget. The move towards a full tax credit system introduces significant new reliefs to help various categories of taxpayers. It provides new reliefs to promote economic and rural development. It also sets out the first major and substantial overhaul of pension tax rules in 30 years. This will provide individuals with a genuine choice and a greater say in their pension arrangements.
Regarding older people, the Bill provides for an increase of £9 a week for a pensioner couple. This is made up of an increase of £6 per week in the full personal rate of old age pension and related pensions and of £3 a week for qualified adults. The increases will apply from June 1999.
The key income tax provisions include the standard rating of personal allowances which are increased by £1,050 to £4,200 per annum for a single person and by £2,100 to £8,400 per annum for a married couple. PAYE allowances have been standard rated and increased by £200 to £1,000. The standard rate tax bands have been increased from £10,000 to £14,000 for a single person and from £20,000 to £28,000 for a married couple. The effect of these changes will be, among other things, to ensure that single people on PAYE will not pay income tax on any earnings under £100 per week and to remove over 80,000 people from the tax net.
Regarding business taxation, I welcome the certainty which has been provided for the business sector as a result of the announcements in relation to corporation tax changes. These include the reduction in the standard rate of corporation tax from 32 per cent to 28 per cent with effect from 1 January 1999; the confirmation that the standard rate of corporation tax for trading income will be reduced by 4 per cent per annum for the years 2000, 2001 and 2002 and by 3.5 per cent in 2003, giving a 12.5 per cent rate on trading income in 2003, and the clarification of the categories of passive income which will fall to be taxed in the future as non-trading income at the 25 per cent rate which are provided in the summary of 1999 budget measures. These provisions will help to ensure that Ireland continues to be an attractive location for foreign investment.
The personal rates for those in receipt of short-term unemployment assistance and supplementary welfare allowances will bring social welfare rates for all categories to at least the minimum recommended by the Commission on Social Welfare. These improvements will apply from June 1999. Child benefit will be increased by £3 a month for the first and second children and by £4 a month for third and subsequent children. These changes will take effect in September 1999.
Regarding farming, the smallholders' unemployment assistance scheme has been revamped at a full cost of £15 million. I hope small farmers will also benefit under the new farm assistance scheme, which will come into effect in April 1999.
An additional £45.5 million has been provided for current spending in the health area for further improvements in services, including the hospital waiting lists initiative and services for the elderly and those with a mental handicap. Total gross spending on health in 1999 will be £3.549 billion, an increase of £334 million on the 1998 level. A total of £29.6 million of the health increases are in the social inclusion area.
The Government remains committed to reducing the burden of personal taxation in order to reward effort and improve the incentive to work. In this regard, the Government has, after careful consideration, decided to move to a tax credits system. This process is due to commence in 1999 by standard rating the basic single and married personal allowances and the PAYE allowances. Future budgets will complete the change over to tax credits.
Section 4 of the Finance Bill gives effect to the announcement in the budget of a move towards a tax credit system by increasing the basic single and married personal allowances and providing that the relief from tax flowing from these allowances will be confined to the standard rate of tax.
In the past, the basic widowed person's allowance was £500 higher than the basic single personal allowance. To maintain this differential between single and widowed persons, the section also provides for an additional personal allowance of £500 allowable at marginal rates for widowed persons. Section 5 provides for an additional personal allowance for widowed parents and other single parents. The section provides for a new standard rate allowance of £1,050, the maintenance of the existing widowed parent's allowance of £2,650, which is allowable at the taxpayer's marginal tax rate, and the maintenance of the existing single parent allowance of £3,150, which is allowable at the taxpayer's marginal tax rate.
Section 12 increases the amount of the basic exemption from tax in respect of non-statutory redundancy payments. Currently the basic exemption is set at £6,000 plus £500 for each complete year of service. These figures will be increased to £8,600 and apply in respect of payments made on or after 1 December 1998.
Section 21 amends the penalty system for late filing of the employer's end of year return. Currently, failure to meet the specified deadline for filing the return results in a flat rate penalty of £1,200. This has now been reduced to a £500 penalty, increasing over a four month period to £2,000. I welcome this because many employers have been caught at short notice regarding the return of the P35 and were liable to the substantial penalty of £1,200. I welcome the reduction to £500.
I welcome the provisions in the Finance Bill. However, I appeal to the Minister to make substantial financial provision to address the current crisis in agriculture. I make a special case for small farmers in counties like Kerry, many of whom have serious financial problems. I commend the Bill to the House.
I welcome the opportunity to make a short contribution on this very progressive Finance Bill. The Bill contains a series of important initiatives which reform the tax system in favour of the lower paid. Personal taxes for all taxpayers are cut and significant new tax reliefs are introduced. The Minister has considerably strengthened the powers of the Revenue Commissioners to combat tax evasion.
The personal tax package in this Finance Bill will amount to £600 million in a full year. That will benefit every taxpayer, particularly people aged over 65 and those on low incomes. The Finance Bill measures remove 80,000 taxpayers from the tax net. Of those, 15,000 are aged over 65. It is particularly heartening that the taxation measures are targeted at the lower paid and the elderly. The measures deliver on the promises made to reduce the tax burden and to improve considerably the position of the less advantaged in the community.
The social welfare measures announced in the budget constitute the largest social welfare and social inclusion package introduced by the current Government. The full year cost of this budget's new social welfare and social inclusion measures is £378 million. It is calculated that in the period 1997-99 almost £1 billion extra will have been spent on social inclusion measures, nearly double the target in Partnership 2000. That expenditure is very welcome and very necessary to give the less advantaged better opportunities in society, in social welfare and in getting back into employment or entering employment for the first time.
The main focus of the budget measures was the older citizen and the family. I welcome in particular many of the improvements envisaged in the carer's allowance.
Deputy Foley mentioned the plight of farmers. In my county there are very severe difficulties. Most of the farmers are small-scale producers engaged in intensive production and they work very hard to make a living. This Government has reintroduced the control of farm pollution and dairy hygiene schemes which were abolished by Deputy Yates when he was Minister for Agriculture and Food. Those measures are particularly necessary and welcome in the area I represent, the Cavan-Monaghan region, where there is drumlin soil and particular difficulties with high rainfall, and people in the farming community have to provide substantial on-farm investment to provide housing and the necessary facilities to carry on intensive farming activities.
A particular concern of the farming community for many months has been the very poor prices paid for cattle. Unfortunately, despite the success of the Minister for Agriculture and Food, Deputy Walsh, in negotiating a substantial increase in export refunds at the European Commission and in having a very successful intervention package reopened by the European Commission—
Success in impoverishing rural Ireland.
When Deputy Dukes was in Government—
Not an ounce of beef has gone to Iran yet.
—his colleague, the then Minister for Agriculture and Food, Deputy Yates, went to Brussels on successive occasions and came back with a reduced level of export refunds. That was the contribution of Deputy Dukes's Government to agriculture during the period 1995-97. When the current Minister, Deputy Walsh, went to Europe, he was at the table negotiating with his EU counterparts, not at a distance giving the impression to the Irish electorate that there was a gun to his head, as Deputy Yates did when he sold out the farming community.
He was invisible.
He signed a contract. That is the difference.
Time is limited for every Member who wishes to speak. Therefore I would appreciate if interruptions could be saved for when Deputies are making their own contribution.
Revisionism always causes these problems.
Accepting the facts and the truth is difficult for Deputy Dukes when it comes to the record of the rainbow coalition in Government. I have given some of the facts in regard to agriculture. I do not know what Deputy Yates did when the control of farm pollution scheme and the dairy hygiene scheme were suspended by the rainbow coalition Government. This Government is providing the finance to reintroduce these necessary schemes which particularly benefit small-scale farmers, the people whom I and Fianna Fáil represent. Perhaps the Deputies on the opposite benches are more concerned about large-scale farmers, who already have the investment in place, and do not care to adequately represent the plight of the small farmer.
We will be back very shortly.
Unfortunately, the income situation of the farming community is still very serious and I am glad the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, is introducing the new farm assist scheme. That scheme is essential to give income support to farmers whose financial situation has become very serious. The Minister stated that the early introduction of this scheme will be part of a package of measures designed to form a practical response on the part of this Government to the plight of low income farmers. The Minister is making changes to the existing smallholder's unemployment assistance scheme by doing away with the signing on arrangements and ensuring that people who are on smallholder's assistance can transfer to the new farm assist scheme. That scheme will assist in the region of 14,000 farm families. I hope that social welfare officials will deal with individual cases as rapidly as possible to ensure that those who need income support get payment as rapidly as possible.
I welcome the extension the Minister is proposing to the rural renewal scheme, which is applicable in the west of my county. I appeal to the Minister to consider the inclusion of all County Cavan under the rural renewal scheme. A strong case can be put forward for the inclusion of the Border counties which have suffered immeasurable damage over a period of 30 years. We did not experience the economic development that other counties did. We did not manage to attract inward investment. We lagged behind in getting investment and in getting jobs on the ground. Fianna Fáil and the Progressive Democrats were the only parties who were in favour of regionalisation. In various debates on the subject in this Chamber I instanced that the Border counties have had the highest rate of unemployment and, contrary to what the Labour Party and in particular Deputy Proinsias De Rossa stated on many occasions, the highest percentage of long-term unemployment has been in the Border region.
The Government has had the courage and foresight to regionalise this country and to ensure that the areas which have not been able to take full advantage of Structural Funds over the years and have not progressed and developed as rapidly as the counties on the east coast will be given the opportunity to make progress with the draw-down of Structural Funds in the next few years.
I have consistently raised with Ministers for Enterprise, Trade and Employment the need to attract inward investment to the Border region and to the Cavan-Monaghan area in particular. Perhaps the Minister could ensure some special measures are put in place to make those areas more attractive for potential investors.
I am glad that, in response to a parliamentary question yesterday, the Tánaiste and Minister for Enterprise, Trade and Employment stated that the Government is committed to ensuring a better spread of development, that the Border region, County Cavan in particular, is a priority location for IDA Ireland and that the agency will introduce a number of significant measures to encourage new investment to this area which is very important. I appeal to the different Departments and various State industrial development agencies to ensure areas which have not benefited from inward investment in the past will be given the opportunity now and that they will be promoted vigorously to ensure they get new employment opportunities, so that the decline in the rural population can be halted, thus ensuring a balance in the distribution of population in Ireland. I know similar problems exist in Northern Ireland where the area west of the Bann has not benefited from the development the area east of the Bann has experienced. The same has occurred here with development predominantly occurring on the east coast, while the north-west and west suffer. I am glad the Tánaiste and Minister for Enterprise, Trade and Employment has given instructions to the relevant development agencies to ensure they prioritise the Border region in terms of employment and the introduction of measures to generate employment.
I too welcome the Finance Bill, which is probably the best I have seen since I was elected to the Dáil. It should be so, considering the economic situation in which we find ourselves. Interest rates, unemployment and taxes have reduced over a number of years. A succession of Governments have put the building blocks in place to develop the economy and long may that continue under whoever is in Government. We endured many years of mistakes with the economy. Since 1987, the right decisions have fortunately been made. Hard decisions were made then but society is now seeing the welcome benefits.
I welcome the measures in the Bill relating to tax. All taxpayers have benefited from them, especially the lower paid. The introduction of tax credits is a welcome step in the right direction. I hope we will see further such steps next year so that a more equitable and fairer tax system will be in place with many of the anomalies ironed out.
I also welcome the changes in the social welfare system, especially for senior citizens. We all want to see them well catered for and that has happened again this year. A £9 increase for a couple is very good. The increases will be welcomed by everyone and seen as a good step towards helping senior citizens.
I welcome the change towards recognition of carers who have not been recognised in the past. All parties have urged various Ministers of Finance to recognise the work of carers in the home. It is a difficult job at times and we have all encountered constituents in our clinics or received phone calls telling of the difficulties they face as carers. This change towards recognition is a step in the right direction and it is to be hoped it will be improved upon in coming years.
I also welcome the increases in child benefit. Child Care is a major issue and the Minister should ensure the Government does not drag its heels on the report on this subject. I understand why it must go to various Departments and I do accept that it should be implemented immedi ately. One encounters many conflicting reports and opinions on this area in the papers and on the radio. I chair the Joint Committee on Justice, Equality and Women's Rights at a meeting of which last week a number of groups with an interest in this area made representations. There was a good deal of conflict among members of the committee about how best to proceed. I ask the Departments examining the report to make their decisions quickly and to ensure that money is allocated to child care if it is needed. It is a major issue and a great problem for people, especially in urban areas.
I welcome section 63 which gives 100 per cent capital allowances for park and ride facilities. This will help relieve the problem of traffic congestion in urban areas. Deputy Deenihan spoke of the rights of motorists. Section 100 is one measure which motorists should welcome. It reduces the rate of duty on liquid petroleum gas which, taking into account the decrease in VAT, is a reduction of about 1.8 p per litre.
A vast amount of money is being invested in roads. What about the rights of pedestrians, such as children going to school or old people? The amount of money invested in their rights is very small. Much more money should be invested in that area rather than catering for motorists. I understand the Deputy's frustration to a certain extent. Motorists pay a great deal of tax on their cars, but there are other people on the roads and on the pavements, and pedestrians are one group who are often ignored. They are not a powerful lobby group. We do not receive letters from the Pedestrians' Association of Ireland asking us to increase spending on traffic lights or on widening pavements. It is an area which should be examined. Pedestrians' groups are very vocal in other countries and are hard working lobbyists of politicians. I accept Deputy Deenihan's point, but the pedestrian should not be forgotten.
Last year, the Minister reduced capital gains tax and was heavily criticised by left wing politicians as a result. I am delighted to see that the take from capital gains tax has increased significantly. I have said for years that the 40 per cent rate was outrageous and to reduce it would be a good thing because it would result in an actual increase in yield. No one who buys shares, especially one who pays tax on their income and then buys shares, should have to pay 40 per cent tax on the profits they receive. It was outrageous and crazy and to decrease it was a good thing. It will encourage people to buy shares, I hope in Irish companies, which is good for the economy. It also strengthens small and medium-sized companies if they invest in the area. That is a good step.
One item which was left out of the Bill and which I would like the Minister to examine is credit unions. They are anxious that there is nothing in the Finance Bill about credit unions and perhaps the Minister could refer to it when he is summing up or raise it on Committee Stage.
On the changes in pension schemes which the Minister has made, I agree that the notion that anyone who has been self-employed for 30 years would get a rush of blood to the head and spend all their pension money is ridiculous. It is a good thing they are allowed flexibility in this matter. The investment and pension world has changed dramatically over the past years and will probably do so over the next few years. To give people more flexibility about where they invest their money to maximise the return for themselves in their retirement is a good thing. Generally people welcome it but I know some people with vested interests are not in favour of it. It will be seen as a good measure.
On the area of relief for film making, a subject close to my heart as I was involved with film groups, I welcome the extension to 2000 but it must be said that other countries are becoming more attractive to film makers. Ireland is not as attractive as it used to be and we need to devise a long-term plan for the future. There is a long lead-in period to film production and people want more security in terms of what will happen after the year 2000. Will the Minister examine this area which has been good for Ireland and the film industry.
I welcome the changes in urban renewal because, like Deputy Smith, I believe that we must try to keep people on the land and in rural areas. Dublin is groaning under the pressure of an increasing population and I have no doubt Cork and other urban areas will experience the same difficulties. There is a lack of planning in our urban areas. Traditionally we are not an urban based population and we are experiencing many difficulties. Many mistakes are being made and we must try to encourage people to remain in rural areas. It is better for them and for people living in urban areas. Dublin is experiencing traffic congestion, housing problems and other difficulties common to urban areas. We must encourage development in rural areas because if we do not, we will have an urban area that extends from Dundalk, down to Arklow and out to Mullingar. That will not be pleasant.
I welcome the increase in spending on health of £334 million and also the waiting list initiative of £20 million. It is extraordinarily arrogant of Deputy McManus, who was appointed to her position only a month ago, to table a motion of no confidence in the Minister for Health and Children. The Deputy should have spent some time familiarising herself with her brief. The Minister has increased spending on health by £334 million and yet the Deputy tables a vote of no confidence in him. That is extraordinary action for any Deputy to take. I welcome the Bill.
I propose to share my time with Deputies Naughten, Perry and Clune.
I propose to deal with some of the issues in the Bill that affect the environment, but before doing so I would remind Deputy Ryan that Deputy Deenihan, like myself, represents an area where there is not an available option to walk to work or school.
If one tried to walk to work along some of our county roads, between pedestrians and motorists dodging potholes, life would be extremely uncomfortable. We do not all live in an area where public transport is available so for a great part of the country, the private motor car is the only feasible transport option for many people. Deputy Ryan should lift his horizons a little above the boundaries of the city of Dublin occasionally and understand that.
The Deputy should lift his horizons also.
I welcome, from an environmental point of view, the provision in the Bill to provide exemption from benefit-in-kind tax to monthly or annual bus or train tickets given by employers to employees or directors – that curious phrase we find in section 28. That is a positive measure and will help to encourage the use of public transport. Although it is a welcome measure, there are areas where it will have little effect. In my constituency it will certainly be of benefit where we have the Arrow rail service. It will be of benefit to those relatively limited areas of my constituency where we have a limited Bus Éireann service but there are other areas where it will have no effect.
Not surprisingly, the section goes on to state that the exemption will apply in respect of a bus or train pass issued in respect of a scheduled licensed passenger transport service. It is normal in a Bill being promoted by the Government that that provision should be made, but it excludes bus transport availed of by a substantial number of people travelling on what we euphemistically call club travel arrangements. It is outside the terms of the Bill but it is fair to point out that we need to have a more enlightened view and a more liberalised approach to the provision of road passenger transport services.
The monopoly of Bus Éireann, diluted as it is by a small number of other scheduled services, is not serving the people of rural Ireland very well. A substantial number of people who commute regularly to Dublin and to other major urban centres will not benefit from this system because the services they use are not licensed scheduled passenger services in the meaning attached to it by the Bill, yet they deserve to be treated in the same way as their other colleagues. I make that marker in favour of the liberalisation of road passenger transport and I would like to see the Government making some progress on that in the near future.
Two other measures which will have an important effect are the provision to continue and extend tax relief for the construction of multi-sto rey car parks, although I know many environmentalists are against them – I do not share that view – and, perhaps even more important from the point of view of an outside of Dublin Deputy like myself, the provision in relation to tax reliefs and incentives for park and ride facilities. The Minister of State may find it unusual that I am praising the Bill from this side of the House but I favour this measure and argued for it for a long time; my colleagues and I have argued for the bus and rail pass benefit-in-kind exemption for some time and it nice to see the Government finally implementing some of the measures we have urged on it.
I am delighted that not only are park and ride facilities in the Dublin area being considered but Cork, Galway, Limerick and Waterford are included also because those cities now have a major congestion problem and they will all benefit from the provision of park and ride facilities. I am delighted that the county areas of Kildare and those of Meath and Wicklow are included also because a substantial number of people commute every day into Dublin from those counties and the provision of park and ride facilities will help substantially to ease the burden of traffic congestion.
In this context I repeat my point about the need to liberalise road transport services because not many people in Limerick or in Galway, for example, can benefit from the normal road passenger or rail transport services. More people could benefit if we liberalised access to the provision of road passenger transport, and the same would apply in the case of Dublin. I would like to see those measures, useful and welcome as they are, given even greater effect by a rational approach to the provision of road passenger transport services.
I welcome the decrease in the rate of duty on liquid petroleum gas. That is a good measure which will encourage people to use more environmentally friendly forms of road transport, such as cars fuelled by LPG, but I urge the Minister to go even further. There are coherent proposals from the Irish LPG association which would complement the measure proposed in the budget. Experience in other countries, and in the UK in particular, has shown that subsidies for vehicle conversion to LPG can achieve substantial results in terms of increased usage. In relative terms, this country has a far more widely based and accessible retail infrastructure for LPG. An increase in usage could result in substantial benefits to the environment. It is time to consider reducing the burden of road tax on cleaner fuelled vehicles, including those fuelled by LPG. It could well be time to consider a reduction in the vehicle registration tax for vehicles which use cleaner fuels, including LPG.
My final point relates to the wide powers proposed for the Revenue Commissioners to detect abuses of the tax system. My colleague, Deputy Noonan, has already indicated our support in principle for those measures, but a degree of suspicion and hesitancy about the detail of the measures. There is one other thing which ought to be done and if it is necessary to give powers to the Revenue Commissioners to do it, that should be done. All the tax scams which have given rise to scandals down the years, including some recent ones, have been conducted largely in the open. Since the mid-1980s we have all become used to reading advertisements in newspapers by financial institutions, brokers and advisers for high yielding investments. If necessary, the Revenue should be given powers to examine the details of every scheme which is marketed publicly and to make the provider of that financial service or instrument explain exactly what is proposed and how it works. If the service breaches the law, the Revenue should have the power to state it may not be marketed. The NIB schemes, about which we have heard so much lately, were advertised on the radio, in newspapers, in magazines and even on television and the Revenue Commissioners did nothing while all these things were being advertised and allowed them to happen. People were drawn into these schemes and they infringed the law. It is only now we are finding out the kind of action which should be taken. There should be preventive action to stop those things happening. A unit in the Revenue Commissioners should be dedicated to an examination of schemes before they get off the ground and give rise to these kinds of problems.
Section 41 relates to the rural renewal scheme and the enhancement of residential tax relief. While these residential tax reliefs are welcome, the Minister for Finance is well aware of my reservations about the scheme. Minister McCreevy will always be known in County Roscommon as the man who partitioned the county into the haves and the have nots. He has divided the county in half with this scheme. However, beggars cannot be choosers and, therefore, I must welcome the move regarding residential tax reliefs, but these reliefs will not bring one extra job to the deprived areas of County Roscommon.
The fanfare which greeted the announcement of the tax designation included incentives of 50 per cent capital allowance for commercial buildings and structures as under the urban renewal scheme – these are not available; 100 per cent capital allowance for industrial allowance buildings as under the urban renewal scheme – these are not available; 50 per cent capital allowances for the development of water, sewerage and road projects for public purposes as approved by the planning authority – these are not available; and double rent allowances for ten years for leases of commercial and industrial buildings – these are not available. The rural tax designation which, according to the announcement, would save this part of rural Ireland has been nothing more than a deceitful smokescreen. While the scheme was announced in December 1997, it was not submit ted to Brussels until last September because the Government was trying to push through the Dublin docklands development before making the case for rural renewal. It took ten months to submit the proposals and the EU is still awaiting a reply to its queries from the Department of Finance. These questions are lying on the desk in the Department of Finance for the past two months. The Government is giving higher priority to the Dublin docklands than to the rural renewal scheme because the "Dublin first" approach of the Government has little to offer the people of the west.
This is the same Government which has a £25 million fund in the bank which was supposed to be for the Western Development Commission. Why has it been delayed? Why can we not gain access to this £25 million? The fund was established on 1 February, but the £25 million lies in the bank and it will not be available until the end of the year because the Government is sitting on its laurels and has not drawn up the guidelines regarding the distribution of these funds which are supposed to encourage investment in industrial development in the region. I hope the Minister of State, Deputy Davern, will ensure those funds are made available immediately.
The Government has failed dismally to encourage investment in the west. While it may have submitted the Objective One proposal to the Commission, it is clear Dublin and the east is the Government's first priority. Earlier Deputies spoke about Objective One and the drawing down of Structural Funds as if they would be the golden millions which would save the west. That is not the case. Structural Funds and Objective One status is about ensuring the Government can make maximum grants available to these regions, but unless it is committed to providing the funds to the west, the midlands and Border counties, we are wasting our time talking about Objective One status because EU funding will involve only small amounts of money. The priority must come from the Department of Finance and from within Government circles. As we have seen from rural tax designation and the Western Development Commission Act, 1998, the Government has not set itself the goal of developing the west. That is reflected at the Cabinet table where there is not one Minister from the west. The Government, whose first priority is Dublin, must begin to recognise there is a large population outside the pale. The Minister for Finance must remove his rose-tinted glasses and implement his commitments immediately instead of trying to pull the wool over our eyes.
There is one man, the man on the white horse, who will single-handedly destroy rural Ireland, that is the Minister for Agriculture and Food, Deputy Walsh. Deputy Smith spoke earlier about re-introducing the control of farmyard pollution scheme and the dairy hygiene grant. I hope it will not take as long to do that as it has taken to re-introduce the installation aid scheme. It took between 12 and 18 months for the application forms to become available, but we were given the impression this time last year that it would happen in only a few weeks. It will be the same with the CFP and the dairy hygiene grant. The funds must be made available immediately and not at the end of the year.
Who stopped them first?
The Minister for Social, Community and Family Affairs is talking about saving 14,000 farmers with the farm assist scheme. The situation in rural Ireland is bad when 14,000 farmers must apply for handouts from the Department of Social, Community and Family Affairs. They cannot make a living and Deputy Walsh is sitting on his laurels. This will be apparent with the Agenda 2000 proposals. Deputy Walsh will be sitting in the corner with his back to the other Ministers while they are negotiating the deal.
He will not be in a pub in County Wexford.
Problems in farming are extremely serious and the Minister is doing nothing to deal with them. He has held up REPS payments for the past month and a half because his Department could not deal with the conversion to the euro. For the past year the Government has been advising industry to prepare for the introduction of the euro but the Department of Agriculture and Food did not do so. The Minister is speaking of giving farmers a top-up payment of £300 while money which should have been paid to farmers months ago, including REPS and headage payments, is lying in his Department. If farmers had received these payments they would not need the top-up payment of £300.
Section 105 deals with vehicle registration tax. The Minister should, perhaps in next year's Finance Bill, consider giving tax relief to car hire companies who install electronic devices which warn visiting motorists to drive on the left hand side of the road. The road accident figures for 1997, which are the latest available, show that eight foreigners were killed and 216 injured in road accidents, accounting for 2.5 per cent of road accidents. These figures do not include the number of Irish people killed by visiting drivers. Road accident deaths destroy families and I hope the Minister will consider such a measure. The Government claims to prioritise road safety and a device of this type, for which a prototype is available, could easily be developed and installed in hire cars. Car hire companies have failed to take any action in this and it is essential that the Minister for Finance examine the possibility of having such devices installed in cars and granting tax relief to car hire firms who have them. I have raised this matter in the House on previous occasions. Every summer tragic accidents are caused by foreign motorists driving on the wrong side of the road. If it is not possible to amend this Bill I hope such a measure will be included in next year's Finance Bill.
I thank Deputy Dukes for allowing me to share his time and to speak on this very important issue. Deputy Naughton has referred to serious anomalies in the upper Shannon relief scheme. While I welcome the changes regarding tax incentives for owner occupiers, many incentives for expenditure on the construction and refurbishment of certain industrial and commercial buildings are being held up because the commercial aspect of the Bill has not been agreed by the EU. It is regrettable that while this scheme was announced a year and a half ago the Department of Finance has not yet received clearance from the EU to initiate the scheme. Much work is being held back because of this. A recent special report on the social and economic position of County Sligo recommended that the designation status for industrial grant purposes be maintained and promoted. It was assumed that Sligo regional airport would benefit from designation status. It now emerges that the airport will not receive any benefit. There are major concerns about the upper Shannon relief scheme.
Is the Minister aware that new car prices, before the imposition of VRT, are significantly lower in Ireland than in the United Kingdom? At times up to 40,000 used cars per annum are imported into Ireland. None are exported despite similar rates of depreciation in both countries. While the Revenue Commissioners have calculated the appropriate VRT to be applied on the importation of used cars they have no power to refund a similar amount on the export of a used car. This is a serious anomaly. Will the Minister ensure that such a refund of the residual element of VRT, as calculated as appropriate by the Revenue Commissioners, is granted on the exportation of used cars so that Irish car owners and garages can have access to used car markets in other EU countries in the way that others have access to the Irish used car market? Irish garages are deprived of the benefit of the single market because they are not in a position to sell used cars to other EU countries because of the high level of VRT imposed on cars in Ireland. What steps will the Minister take to ensure that Irish car owners and garages have access to used car markets in other EU countries?
Deputy Naughton referred to the Western Development Commission. The commission was established on 1 February and the terms and conditions for the fund have been established. The sponsoring Departments, notably the Departments of Finance and Enterprise, Trade and Employment have not given the necessary clearances and funds cannot be released. It is regrettable that the commission which is statutorily established cannot release any of the £25 million. Can he clarify the position?
Can he also clarify the position of the commercial aspect of the upper Shannon relief scheme? In south Sligo, a developer is prepared to build 55,000 square feet of industrial units on a commercial park of 3.5 acres as soon as the scheme is announced which will allow him the capital allowance. I appeal to the Minister not to link the scheme to the Dublin docks scheme. The scheme will stand alone and I appeal to the Minister to announce the timescale for the scheme.
The Western Development Commission will not have its inaugural meeting until Monday next.
I too refer to Section 105 regarding VRT. The Minister described these changes as a green tax which would reduce toxic emissions and improve the environment. I challenge this description. The measure discriminates against the diesel engine. I did not think I would extol the virtues of the diesel engine which has always been regarded as noisy and dirty. The diesel engine has been with us for 100 years but it has been greatly refined in the last four or five years. It is now a much quieter engine and traps have been installed to catch matter before it is emitted into the atmosphere. Smoke emissions from diesel engines have been reduced. Diesel engines burn much less fuel than petrol engines and emit less carbon dioxide which is one of the greenhouse gases which we are committed to reducing under the terms of the Kyoto protocol. The diesel engine is willing to do that for us but the Minister discriminates against it. The new type of engine emits less particulate matter. This is one of the new words in terms of air emissions and reducing air pollution. It is very much to the fore in terms of environmental health and is an issue that has not been addressed to date. This type of engine is also much quieter than the petrol engine.
My colleague, Deputy Dukes, referred to liquid petroleum gas and said vehicle registration tax should address not only engine capacity but the type of fuel used. Diesel engines should also be considered given that they are more environmentally friendly than petrol engines. What research has the Minister for Finance carried out and did he consult with the Minister for the Environment and Local Government before introducing changes in the VRT bands, given that the changes do not take into account the diesel engine? I would welcome some changes in this area.
I wish to refer to child care and the proposals contained in the budget. Child benefit has not been increased sufficiently. Fine Gael policy to increase child benefit would help to address the differences in this argument. Parents should be given the money. It is then their prerogative to decide whether to spend it on child care facilities or babysitters. This would go a long way towards addressing the imbalances.
Section 29 provides that where employers provide a place in a child care facility it will not be taxed as a benefit-in-kind. It also provides that where a number of employers come together for the purpose of providing child care facilities it will not be taxed as a benefit-in-kind. Will the Minister take this a stage further? A small employer in a small town will not get involved in financing or providing child care places. If they bought a place in a local nursery and put it at the disposal of their employees would the Minister be prepared to consider it? This is a matter about which those providing child care feel strongly. This section addresses the larger employer but does nothing for the small employer.
I am pleased to contribute to the Bill. Given its size, I thought it was the consolidated Bill. This is one of the largest Finance Bills in the history of the State with up to 200 sections. They are not just padding. Many of the sections introduce important initiatives which will reform the tax system in favour of the lower paid, cut personal taxes for all taxpayers, introduce new tax reliefs, set out arrangements for pension provisions and strengthen the powers of the Revenue to combat tax evasion. The Bill is indicative of the character of the Minister for Finance, a man who is not afraid to grasp the nettle and take innovative decisions.
I wish to address some of the misconceptions perpetrated by the Opposition, as well as some other parties, concerning the Government's approach and that of the Minister to tax reform and Fianna Fáil's tax policy in general.
In 1995 the Taoiseach requested me to head up a committee to prepare a tax reform package to be implemented on our return to Government. The main planks of our policy were aimed at encouraging people into the workforce, to promote business development and to take the lower paid out of the tax net. The document was produced and accepted by the Front Bench in January 1997. It included provisions to direct tax cuts towards reducing the top rate of income tax and the basic rate over a five year period to 44 per cent and 20 per cent, respectively – the rates have already been reduced significantly in a two year period; to control public spending, to introduce a carers tax allowance, consider reducing capital gains tax and to clarify the role and ownership of semi-State companies, all of which were introduced by the Minister in his first budget. As well as the tax reform package there were two important words which are critical to any real change in the taxation system, "tax credits".
The tax credits system proposal does not belong exclusively to any one party. The Commission on Taxation chaired by Miriam Hederman O'Brien, ten or 15 years ago, advised that to make the tax system equitable the tax credits system was the way forward. We looked at that proposal and decided it was time to grasp that nettle to ensure those who benefit in the years ahead under the taxation system will be the poor and the less well off in society. The Minister, Deputy McCreevy, took the plunge this year by introducing the tax credits system to a degree. After being goaded over the past year that Fianna Fáil was afraid to take this direction the Government was abused and denigrated by Deputies Bruton and Noonan who claimed this system was stolen from them. They implied it was the sole prerogative of Fine Gael to bring in a tax credits system. However, we had the idea and we introduced it. That is the difference between the party on this side and the party on the other side. We are a party of action, not a party of the debating society or the literary and historical society of UCC, UCD or wherever. We are a party that sees what has to be done and takes action, not for our own benefit but for the poor and the less well off.
Deputy Noonan criticised the Minister, Deputy McCreevy, for not going far enough. Criticism for criticism sake is unworthy of him, a man for whom I have great admiration, having worked with him on the committee during the past year and a half. He examines all the propositions put before him in an objective manner. I am surprised he did not examine the proposed change in the system in an objective and honourable way. The Minister has said this is the first step and that he will progress in his next three budgets to give it full effect.
As in many areas of legislation, whether social welfare, health or education, Fianna Fáil has introduced a seminal change in the taxation system to benefit the lower paid, the weak and the less well off in society. One of the cornerstones of our policy was to reduce the tax burden on the lower paid. The decision to increase the level at which someone begins paying tax to £100 per week is a positive step in this direction. We must reward employment, not unemployment. It is imperative to co-ordinate the tax and social welfare systems to ensure people are better off working than on the dole. I look forward to greater movement towards the merging of the tax and social welfare systems in the years ahead.
In the short time I have, I can only touch on some of the many welcome new proposals by the Minister in this Bill. I wish to share my time with Deputy Dennehy.
Carlow-Kilkenny): Is that agreed? Agreed.
Massive funding has been committed to the acute hospital system; over £700 million extra has been put into that system since this Government came into office. However, acute beds are still being occupied by patients for whom there are no convalescent beds. One of the great problems adding to waiting lists is that people cannot get into convalescent homes after their operations. The Government has noted the dire shortage of convalescent beds, which the Minister is addressing under section 42 by introducing capital allowances for expenditure on private convalescent facilities. This is a very welcome and worthwhile provision, which will give a kick start to business people to develop those facilities.
Child care facilities are a problem for every sector and area of the country. This problem is increasing due to the number of women returning to work. The Government recognises the need for child care facilities and two approaches were taken in the budget in that regard. Capital allowances for expenditure on child care facilities which meet the required standard, as provided for in the Child Care Act, 1991, will help people to provide these facilities. The Minister made a further change whereby the provision of child care facilities by employers on a free or subsidised basis will no longer be subject to benefit in kind income taxation. This is another helpful provision which will go some way towards reducing the cost of child care facilities. More must be done to meet this demand but I have no doubt that the Government will provide those facilities over the coming years.
Section 44 is a very significant section aimed at the provision of sufficient rented residential accommodation for third level students at a reasonable cost. Every September and October there is a mad rush in every town with an institute of technology or a university for student accommodation, which is not cheap. It is important to provide standard, clean accommodation – it need not be plushly furnished – at a relatively cheap cost. The Minister is helping in this regard by giving capital allowances under section 44 for the provision of such accommodation. I look forward to many people taking up the challenge to provide the necessary facilities for students.
The Minister has made a very important change in regard to retirement pensions. Up to now, a self-employed person had only one pension option, a retirement annuity. On retirement, a self-employed person was obliged to surrender his accumulated pension fund to an insurance company, which would then pay him a fixed rate annuity until his death. If there was a balance on the fund it did not revert to his estate. Under this change, the Minister is allowing such a person to make his or her own decision, to a certain extent, on how he or she wishes the accumulated fund to be utilised.
Some scares have been raised that people would waste their money. However, the majority of self-employed people running their own businesses will not suddenly get a rush of blood to the head and go off to the Caribbean or on a world tour. Of course, some people will fall by the wayside but there cannot be 100 per cent certainty about anything. This is a very good and welcome innovation by the Minister, Deputy McCreevy.
Irish registered non-resident companies have been a thorn in the side of this country in recent years, especially over the past year and a half. This did nothing for our reputation. I am glad the Minister has brought in a package of measures which are a comprehensive and focused response to the problems caused by certain IRNR companies. This package will sort out the problem of people utilising and abusing the system.
The powers being given to the Revenue are causing a certain amount of concern. They are a result of what has been made public at the tribunals. When Deputy Quinn was Minister for Finance a number of years ago he brought in a section which was termed a whistle blower's proposal and which was turned down as a result of immense pressure from solicitors, accountants, etc. The main concern being expressed is that the Revenue will investigate the accounts of every individual, but I do not think that will happen. However, it would be no harm to have a body or ombudsman which could assess an aggrieved person's case rather than having to go through the Revenue appeals system. That would remove some people's fears. There is a schizophrenic element in our attitude to taxation. We all believe everyone should pay their taxes but we do not want checking of tax payments. I agree with Deputy Dukes' view that financial schemes which yield high earnings should be examined. If they are to yield higher interest rates than any other institution, there is a risk involved. Where there is a high risk, people will take big chances. I commend the Bill to the House.
I welcome the Bill. Considering its volume, which is akin to that of the Taxes Consolidation Act, it is difficult to believe it was produced in such a short time. It displays a consistent trend, about which we spoke last year and which the Minister has flagged. I am sure he will put the Bill's provisions into practice over the next three years.
When I spoke on the Finance Bill last year, I complimented my colleague, Deputy Michael Ahern, who headed up the backbenchers' review group on taxation when Fianna Fáil was in Opposition. The difference between it and other review groups in the past is that its recommendations are being implemented. I welcome the general changes which are occurring in this area. As somebody involved in the care of the elderly over the years, I particularly welcome the many good aspects of the Bill which relate to elderly people whether they be taxpayers, those requiring accommodation in private nursing homes or others.
A number of specific issues are grabbing attention. One of them relates to the powers accorded to the Revenue Commissioners. In many cases, people want to have it both ways, including Members of this House who have been vocal in seeking the setting up of tribunals, a head on a plate and general retribution while resisting efforts to confer proper powers on the relevant authorities to deal with the scams and general misconduct which occurred. It is not just individuals who have offended. We saw corporate groups and financial institutions taking a slice of the action to such an extent that the ordinary taxpayer was losing confidence in the system and changes were required.
The Minister for Finance has had the will and courage to act on this issue. Deputy Dukes held a senior position in Government when the advertisements were placed in newspapers and broadcast on the radio. He did not act on his fears at that point, in spite of being a very conscientious public representative. Deputy Dukes expressed suspicion about the details of this scheme which have not yet been announced. These tax evasion schemes were ongoing from the mid 1980's but the Minister for Finance is the first person to act in a proactive way to cut them off. We cannot have it both ways.
Public reaction to the announcement could be categorised into three groups. The first category is made up of compliant taxpayers, members of the public who welcome the fact that at long last somebody is standing up in this House prior to illegal activities occurring, to put laws in place and confer powers on the relevant authorities. The second category comprises people involved in business – investors, company people, accountants or others. They envisage administrative problems arising and, in some cases, may envisage a curtailment of their income sources. I am sure their concerns will be put to rest, together with those of groups concerned with civil liberties. The third group is made up of people who availed of this kind of skullduggery, the fraudsters who reaped the rewards of a very lax financial control system. They will be hit the hardest, and rightly so. I applaud the Minister for having the courage and the will to take them on.
Last year, the fact the Minister closed off so many of these loopholes almost went unnoticed. He is now closing off more loopholes in an attempt to cut off the cosy cartels to which Ministers referred in the past, but failed to tackle. The Minister's background and expertise gives him an insight into this area. He is willing to stand up and be counted and to take on members of his own profession. I am sure he will be very fair in his approach.
Current standards are unacceptable. I am a Member of the Oireachtas Joint Committee on Finance and the Public Service and of the Committee of Public Accounts. We have dealt with issues which have highlighted the need for a financial regulatory body for institutions and the need to protect compliant taxpayers who have suffered from these frauds over the years.
Pensions for the self-employed and others were referred to. If the requirement for people to go to a specific unit of the financial market to transact their business had ever been challenged, it would have been found to be unconstitutional. Were we suggesting people would go berserk and get a rush of blood to the head? They had worked all their lives to provide their own jobs and sources of income. I welcome the changes in this respect. We will hear complaints from some people but it is only fair that others have the option to invest in the best possible source of revenue.
The pensions issue is a time bomb ticking away. I have read comments by the previous Minister for Finance, Deputy Quinn concerning it. However, nothing was done about it until now. I welcome the fact that the Minister is addressing it. Some people's pension provisions are disgraceful. I am working with CIE bus drivers at the moment and cannot believe the circumstances surrounding their pension rights. For example, the pension is terminated on the participant's death and no allowance is made for a spouse. Everybody is aware the State will not be in a position to support people in years to come unless remedial action is taken.
One of the other issues which has attracted attention is the issue of child care facilities and allowances. Former Taoiseach Garret Fitzgerald misled stay at home housewives with a promise of £9.60 per week. That did not materialise. People voted for that proposal and were badly caught out. However, it was one of the first times that the need to compensate women who do not wish to participate in work outside the home was recognised. It was a mistake not to include that category in recent studies and we cannot proceed without taking account of those people. The problem of child care must be addressed in a global fashion and proper provision must be made. It is a major problem that will have to be dealt with. The Minister has moved to address it in various ways by providing capital allowances for premises, etc.
I, like Deputy Michael Ahern, welcome the capital allowances for the provision of private nursing homes. Up to now the State has failed to provide for our older people and I do not believe we will be able to fund such facilities from the public purse in the future. Demographic trends indicate that caring for the elderly will pose a major problem in the next ten to 20 years. Acute hospital beds are occupied by persons who could be catered for with loving care and a welfare type approach. They need nursing and care but do not need to occupy acute hospital beds. However, I will resist any attempt to remove them from hospitals until alternative facilities are available for them. A Fianna Fáil Administration introduced the Private Nursing Homes Act, 1991 which provided for subventions for such persons. The provision for private nursing homes in the Bill is another step forward. I am pleased the Government recognised the human face of our population. We have provided facilities and capital allowances for the establishment of factories and warehouses. Why can facilities not be provided to cater for our older population?
The Opposition's approach appears to be to table a motion of no confidence in Minister after Minister, irrespective of how excellent he or she is at the job. This mechanism will give us the opportunity, as it gave the Minister, Deputy Cowen last night, to point out the radical changes between 1993 and 1997 and since then. Having been chairman of the Southern Health Board, I have an interest in Cork University Hospital. I welcome the Minister's announcement of an allocation of £2 million for a linear accelerator for cancer treatment. That was a speedy response to a problem that arose before Christmas owing to a breakdown of the equipment there. I also welcome the capital grants he will make available for the maternity and neo-natal hospital and others.
And Mallow and other areas. This is not rhetoric but fact.
What about the hospital waiting list?
Is the Deputy's party claiming responsibility for it?
We will not cut the west adrift yet. I hope each Minister will have an opportunity to respond to a vote of confidence in the next few months to enable us to set the record straight.
I welcome the Bill, many aspects of which are innovative. I am pleased Cork is listed first under the park and ride initiatives, although I accept that is due to the alphabetical order of the list. That scheme was initiated there ten years ago by the town planning officer. Cork Corporation, Cork County Council, CIE and the chamber of commerce invested money in the project and the rest of the country is following that initiative.
I wish to share my time with Deputies Ring and Sargent.
That is agreed.
Deputy Dennehy was enthusiastic when concluding his contribution. He is more than committed to his cause, his party. If that was recognised more by his colleagues, he could be promoted to sit on the front bench alongside the Minister of State, Deputy Davern.
In the time allocated I will not be able to conduct an extensive trawl through the Bill. The annual debate on the Finance Bill involves the Government defending everything in it and the Opposition trying to pick holes in it. It is relatively difficult to argue with most of the contents of this Bill. We are debating it at a time when record resources are available to the Government. Given that, there were opportunities for good news announcements in the budget and in this Bill, and I welcome most of them. I wish to comment on some of the issues in the Bill.
The income tax proposals announced in the budget were welcome. My constituency colleague, Deputy Michael Ahern, indicated the tax credit system proposed in the budget, which will be implemented following the enactment of this Bill, emanated from a committee he chaired and was a promise made by Fianna Fáil before the last election, but I do not recollect that promise. The 1997 election debate focused on, among other issues, the debate between the tax credit system proposed by the outgoing Government and the case put forward by the Deputy's party that we should concentrate solely on reducing the rates.
The Deputy was too busy battling with the Minister, Deputy O'Keeffe.
It is not I but the Minister of State and his senior colleague who do most of the battling with the Minister of State, Deputy O'Keeffe.
I welcome the tax changes in the budget. We could have a lengthy, but useless, debate on which party's idea it was to introduce a tax credit system. It is a fairer way of spreading whatever resources are available. It will particularly benefit those on a lower income and we all support that concept.
A dilemma is posed when we debate income tax, corporation tax, VAT, etc. We have a complicated tax system. There is a large number of reliefs and administrative equations in the tax system. There are various reliefs in the Bill which I welcome. It is difficult to argue that we must maintain and expand such reliefs, while also arguing that we should make our tax system less complicated. If the economy continues to remain as strong as it is, I hope that over the next five to ten years we will be able to move not only towards a fairer but a simpler tax system. We will have to move away in time from many of the relief structures in place towards a more simple and straightforward taxation system.
Towards that end, the Minister, in his budget speech or in the debate on the 1997 Finance Bill, indicated that he would consider reviewing the tax year. Why can we not have a tax year running from January to December? There may be a simple reason as to why the tax year ends at the beginning of April. If the tax year ran from January to December with the provision that returns be made a few months later, it would be clearer and easier to follow not only for self-employed, but for others who are not only trying to plan their tax business but to ensure their accounts are in on time. The Minister might indicate in his reply if he has considered reviewing the tax year.
Because the Minister of State, Deputy Davern, is present, I wish to refer to the rural renewal tax scheme, which has been expanded somewhat in the Bill. We all welcome this type of scheme. Today and tomorrow we will debate Agenda 2000 proposals from Brussels and their impact on rural Ireland. The rural renewal scheme is property based and I do not have any difficulty with that. The Minister of State should argue more strongly for a scheme based as much on enterprise and rural development as on property, letting and tourism.
Mainstream farming is in crisis. While alternative farming enterprises and small enterprises are not the solution to all farmers' problems, incentives to encourage further expansion in that regard would be helpful. While we have to tidy up the tax system, I welcome the rural renewal scheme, but it should be more extensive, partic ularly at a time when agriculture and rural Ireland are facing bleak times. I think it must be more extensive and reach not only the townlands in the west, but every townland in the country. It would be helpful if the Minister of State could spend some time over the next few months trying to argue for incentives which would allow people invest time, resources and finance in new types of rural enterprise. I think the response would be positive.
I wish to comment briefly on the motor industry. I am sure most speakers have spoken on the VRT proposals and during the debate on the budget most of us mentioned our surprise at the Minister's proposals. Every Minister is entitled to make a mistake or two, and not everything will be perfect in a Finance Bill such as this, but I repeat what I said during the budget debate, namely, that a mistake has been made in the context of the VRT proposals. The motor industry was on its knees ten or 15 years ago, but as a result of better economic circumstances and in particular as a result of the scrappage scheme which provided an incentive for people to purchase new cars, the industry took off. More taxes were collected, with Revenue and the consumer benefiting. The provision in the Finance Bill is a step in the wrong direction and even at this late stage I ask the Minister to re-examine the matter.
Motoring expenses are high enough already. There had been improvements in the industry and I think this provision is a step backwards. In his defence the Minister cited the environmental aspects of his proposal. Unfortunately, however, I cannot agree with him. My colleagues, Deputy Clune and Deputy Dukes, mentioned LPG and its very low usage here in comparison to other countries, particularly Scandinavia. LPG is a very clean fuel. The Minister's proposals on VRT will make absolutely no improvement in terms of pollution and rates of emission. It would have been more meaningful if he had provided some incentive for an increase in the use of LPG. If he will not do so in this Bill, it is something which should be examined in future.
A related issue is park and ride facilities, and the provisions in this regard must be welcomed. It is difficult to know what impact the provisions will make as we do not have the sort of public transport infrastructure which will allow a large number of people take advantage of park and ride facilities. Park and ride facilities are, therefore, only one side of the coin. The other side is the necessary infrastructural investment in train and bus services. That is a debate for another day but I hope we will see some progress in that regard.
What the Minister described as the new social tax reliefs are welcome. Tax relief on private convalescent facilities are very welcome, positive and necessary. We are all aware of the crisis in the hospital system and the need to ensure places are available, particularly for the elderly. I hope that as a result of the tax relief progress will be made.
I wish to raise the betting tax proposals in section 106. There has been much loose and silly talk about the proposal, but if it is not introduced jobs and revenue will be lost. I welcome the fact that alternative funding proposals are being discussed and hopefully they will be announced shortly.
During a debate some months ago I made the point that we need to put in place a scheme for owners of thoroughbred brood mares. All the incentives are for one side of the equation, and I have no difficulty with them. I think the Department of Agriculture and Food, certainly the Department of Finance, received a submission from the ITBA which does not appear to have been acted upon. I ask that it be examined over the next 12 months.
I am delighted to see the men interested in horses sticking together. I know Deputy Bradford and the Minister for Finance have an interest in horses.
The Finance Bill suits the rich whom the Government has no intention of tackling. The introduction of the additional powers for Revenue is because of the tribunals. One would not see what is going on here happening in Italy or with the Mafia, with certain people being kept like the Queen of England, another element being given money and not knowing where they put it and a further element asking for money without us knowing what was done with it. The people are sick and tired of politics and politicians and do not really believe that politics or politicians will take on the rich people. We have heard in the tribunal that Ben Dunne gave away cheques without knowing whether he had signed them.
I worked hard in the bakery industry and employed a few people and I wondered in the 1970s, 1980s and 1990s why no Government would do anything about Mr. Dunne and his likes who were squeezing small business people out of business. He sold bread below cost. Are my comments hurting the Minister of State at the Department of Agriculture and Food, Deputy Davern? Mr. Dunne hurt us and Deputy Davern and his likes did nothing about it.
I remind the Deputy that naming people who are not here to defend themselves—
I do not mind naming him as he is appearing before the tribunals and is currently in the public arena. He caused enough trouble when he was in a powerful position. He squeezed small business and we now know why Governments did nothing about it.
As a result of the new powers being given to Revenue old people who have a few pounds saved for their funeral will not put it in the banks out of fear that Revenue will check their bank accounts. They will be afraid they will lose a small part of their pension. In rural Ireland, as happened in recent years, thugs will beat up and rob old people. We saw an example of this last week. The Finance Bill is encouraging old people to hold money in their houses rather than put it into financial institutions. Why will the Revenue and Government not take on the banks instead of taking on poor people? Implementation of these Revenue powers will start, not at the top, but at the bottom.
We will have an opportunity to discuss the legislation being introduced by the Minister for Social, Community and Family Affairs, which speaks about a process involving gardaí, social welfare officers and certain powers. A pilot scheme was undertaken and I do not know why legislation is necessary to extend it. The proposals will not be implemented to any great extent in rural areas as there are no gardaí to implement them. Maybe the social welfare officer will act as a garda since there is a shortage of gardaí. Like Revenue and the Minister for Agriculture and Food, the Department of Social, Community and Family Affairs will attack small farmers.
At least the Government has recognised that it has to do something about the problem, and the Department of Social, Community and Family Affairs will introduce the small farmers' scheme to help small farmers who have been attacked by the Department. Like the Department of Agriculture and Food, the Department of Social, Community and Family Affairs does not realise that a problem still exists in agriculture and that farmers are hardly able to feed their families. We have read this in report after report, but social welfare officers go to small farmers, count the number of cows and sheep and say that the cattle are making £60 or £70 per week. These people are not living in the real world.
We will soon be living in a police state, like Northern Ireland, if these powers are introduced. I never thought I would see the day when we would have a police state, given that people died to bring freedom to the country. We are not far from a police state. Social welfare officers and gardaí will be stopping people going to mass and funerals. If a garda does not like a person he can stop them to ask where they are going. This is outrageous and should be opposed.